A Systematic Literature Review of RegTech: Technologies, Characteristics, and Architectures

Abstract

Regulatory Technology, or RegTech, uses information technology and digital innovation to help the financial services industry realize regulatory compliance. RegTech helps them to streamline compliance processes. Although dominant in the financial sector, ideally, RegTech can be implemented in various sectors other than finance. The critical elements of RegTech are regulated entities, supervisors and/or regulators, regulatory data, and data generated by regulated entities' activities. The technology at RegTech will bring all these elements together to achieve regulatory compliance. This study describes RegTech regarding technology utilization, characteristics, and architecture in the financial industry. The results of this study can be adopted as a basis for answering the challenges of implementing RegTech in various sectors of activity. Therefore, we used the systematic literature review approach to review several prior studies. Based on the search results, thirty-seven articles were chosen successfully for further review. RegTech focussed on four characteristics: agility, speed, integration, and analytics. Various technologies are used in RegTech, such as big data analytics, artificial intelligence, machine learning, cloud computing, blockchain, etc. Generally, RegTech architecture components can be grouped into enterprise architecture (EA) layers: business, data, application, and technology.